Long-Term Employment Trends

Employment in Texas’ wood product manufacturing subsector rises during economic expansions and falls precipitously during downturns. Texas subsector employment rose by 53 percent in the 1990s, peaking at 35,500 jobs in 1999. Employment fell sharply during the last recession but has recovered steadily since then, rising by 29 percent from 2011 through 2017. In all, 2017 subsector employment in Texas was 4 percent higher than in 1990; the U.S. subsector job count, by contrast, was 27 percent lower (Exhibit 1).

Subsector Economic Output Trends

Texas’ inflation-adjusted GSP in wood product manufacturing declined by 13 percent from 1997 to 2015. In the same period, U.S. subsector output fell by 9 percent (Exhibit 2).

Sources: U.S. Bureau of Economic Analysis and Texas Comptroller of Public Accounts

Subsector and Industry Concentration in Texas

One method to measure a subsector’s regional strength is the location quotient (LQ), a ratio of the subsector’s share of employment in a region to its share of employment in the U.S. as a whole; the higher the LQ value, the more “concentrated” the industry. LQ values often are used to identify regional strengths and inform economic development and investment decisions.

A high LQ can identify a regional industry that enjoys a competitive advantage compared to other regions; an LQ below 1.00 can indicate competitive weakness. A regional LQ of at least 1.25 (meaning the subsector’s regional share of total employment is 25 percent greater than in the U.S.) can indicate an exporting subsector and the presence of a regional “industry cluster,” a group of interrelated firms providing related products or services and sharing similar needs for workers and suppliers.

Texas’ statewide 0.71 LQ in wood product manufacturing indicates that the subsector and its industries are not highly competitive (Exhibit 3). A regional assessment of employment concentration is useful, however, as the size of Texas’ economy and workforce can obscure regional industry strengths. The wood product manufacturing subsector is highly concentrated in the Southeast and Upper East Texas regions and has an above-average employment concentration in Central Texas (Exhibit 4).

Exhibit 3: Wood Product Manufacturing in Texas: Industries

Jobs, Wages and Concentration by Industry

Industries

NAICS

2016 Jobs

2010 to 2016
% Change

2016
Average Wages

2016
Location Quotient

Wood Product Manufacturing

312

23,038

17.80%

$41,025

0.71

Sawmills and Wood Preservation

3211

3,527

9.20%

$44,021

0.47

Veneer, Plywood and Engineered Wood Product Manufacturing

3212

4,815

34.70%

$49,106

0.76

Other Wood Product Manufacturing

3219

14,696

15.20%

$37,658

0.79

Source: Emsi and Texas Comptroller of Public Accounts

Exhibit 4: Wood Product LQ and Employment by Region, 2016

Jobs and Employment Concentration

Region

2016
Location Quotient

2016 Jobs

Southeast

5.17

3,757

Upper East

2.94

3,369

Central

1.23

1,603

Metroplex

0.71

6,717

Alamo

0.6

1,830

Gulf Coast

0.45

3,555

West

0.45

325

Upper Rio Grande

0.37

335

Northwest

0.36

211

Capital

0.31

821

High Plains

0.27

278

South

0.1

211

Texas

0.71

23,038

Source: Emsi and Texas Comptroller of Public Accounts

Conclusion

Manufacturing continues to drive output and productivity in the Texas economy, creating jobs paying well above the statewide average. It also contributes significantly to job creation in other industries, particularly in design operations and services.

Wood product subsector employment rose by 18 percent in Texas from 2010 through 2016, buoyed by demand from residential construction and housing starts. The subsector will continue to face competition from imports and from material substitutes such as rubber, plastics and steel.

HB855 Browser Statement

In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Google Chrome, Microsoft Internet Explorer and Apple Safari.